Pay-day loans a saving grace for Australians in financial stress

Pay-day loans are a saving grace for a growing number of financially-distressed Australians, a personal debt management company said today. Commenting after the recent release of the Caught Short report examining Australia’s burgeoning pay-day lending industry, personal debt management company, Debt Rescue said the loans were becoming one of the few options open for thousands of individuals on the brink of financial disaster.

“In a perfect world we wouldn’t need pay-day loans, but in the current climate they fill a void for people who have nowhere else to turn,” a Debt Rescue Case Manager said. “People in severe financial hardship are relying on pay-day loans because they have exhausted all other avenues – traditional banks won’t lend them money, the government won’t, they have tried family and friends and the creditors continue to hassle them.

“It is impossible to get all creditors to accept a payment arrangement, they can’t go bankrupt because the total debt is too low, a debt agreement is not viable, financial counsellors only provide budgeting tips and charities can support with food and clothing but generally offer no funds to pay debts.

“Simply changing the law to stop perceived unnecessary lending practices doesn’t remove the need and just disguises the real issue.

“It is a desperate situation for a growing number of people who feel they have nowhere else to go”.